Tesla in Talks to Build Cars in Shanghai

Asia’s tech titans may shift more manufacturing to the U.S. (see previous post), but electric car maker Tesla (TSLA) is said to be mulling over the opposite.

The auto giant is holding discussions with local authorities in Shanghai about building its first manufacturing facility in China. The factory’s purpose would specifically be to build cars for buyers in the world’s second-biggest economy. The Middle Kingdom is a fast-growing market for Tesla: In 2016 Chinese sales made up 15% of revenue, around double that of the prior year. The move would allow Tesla to bring down labor and shipping costs, as well as make its cars more affordable for Chinese drivers, as imported autos attract steep tariffs.

A statement from Tesla says that the Palo Alto-based company will make a decision on its production plans by the end of this year. Tesla is due to start production of its Model 3 sedan in July. The car has a lower price point than the existing Model X and Model S.

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